Marketing During a Recession, Part 4: Come Together Right Now

Partnerships, alliances and cross-promotions date back to Eve giving Adam that “come hither” look. I once worked on a cross-promotional website between Nissan and Crayola. Apple and AT&T are now making a killing with the iPhone. You can’t buy a McDonald’s Happy Meal without some movie-related toy in the box.

Unfortunately, you don’t see many small businesses or startups thinking in terms of collaborations. Here’s what they’re missing out on…

1. Sharing Brand Equity: One of the toughest challenges for a small or new company is building credibility. If you partner with another organization that has a strong image, some of their brand equity will rub off on you. This is particularly valuable if you’re entering a new market where you’re unknown.

For a large well-known company, the challenge might be image enhancement. That’s where collaborating with a non-profit comes into play. In a recession, charities and the arts take a real beating. You can help your favorite charity by collaborating with them: don’t just donate money, work on something together. In return, you’ll earn gratitude from their fans and goodwill from others who see that you care about more than money. (Shhh, you don’t have to tell them the truth.)

A very effective non-profit partner is a university. They have the credibility, as well as thousands of students and alumni, but often not the cash or marketing know-how, so they’ll partner with someone who’s right for their image and their students (tobacco companies, put down your phones).

2. Sharing Promotional Costs: Rather than cut out your advertising, why not split the costs with a partner? Craft a clever cross-promotion, then jointly advertise it. You can also share resources, such as sales teams and design agencies.

3. Sharing Customers: In a recession, organic growth is extremely difficult, since consumers are feeling less adventurous than usual. That’s why many companies focus on stealing market share from each other, which can be expensive and difficult, with the loser headed for the final exit. A better option is to find a non-competitor in a different industry who has a different customer base, and to cross-promote. Of course there will be some customer overlap, so make sure your potential partners will bring new faces to the table. This is a particularly effective way to tap new markets such as another country: go there with a date who knows the scene.

4. Creating Differentiation: To prevent your products from becoming low-margin commodities, make your brand stand out from your competition in ways other than price. One way to differentiate is an exclusive, highly visible partnership with someone else. Since it’s an exclusive, it can’t be replicated. The aforementioned cross-promotion between Yoplait and Susan G. Komen helps Yoplait stand out in the crowded yogurt section, and gives consumers a feel-good reason to pick one brand over another.

5. Creating News: A cross-promotion always warrants a press release. (Just make sure it’s written well!) And it’s newsworthy for your local chamber of commerce newsletter, city business journal, or national trade publication, depending on the size of the corporate participants. Popular brands also have devoted bloggers and Facebook groups, where news of your cross-promotion will get instant notice.

Easy, right? Well, as with romance and dating, you want the right partner with mutual expectations stated clearly up front. But unlike dating, you don’t want someone who’s exactly like you…
Make Collaborations Complementary

Obviously, you should avoid collaborating with a competitor, since that doesn’t expand your market, and it might bring the government down on your head. In addition, if you split up (yes, divorces happen in the corporate world), your former partner might run off with your trade and technology secrets.

Instead, find a company that offers complementary products or services — different but supportive.

For example, if you have a new brand of wine, don’t collaborate with other vintners. That’s potentially illegal. Instead, talk to airlines, jewelers, art galleries, symphony orchestras and others whose customers might also like wine. Consider co-sponsoring a special event with wine tasting and giveaways.

Of course, even complementary products don’t always mix. Although Lexus buyers might love wine, you’ll never see alcohol and cars promoted together. Except at a NASCAR event.
So Think Before Jumping Into Bed Together

Not all collaborations are matches made in heaven. I personally had an issue with Apple selling iPhones through Wal-Mart, and last year, fans of the all-natural and progressive Honest Tea brand were miffed by a devilish deal with Coca-Cola. So if you’re organizing a bike-a-thon for the environment, an oil company might not be the best choice for a promotional partner (though you know the oil companies would love to use you for greenwashing).

Before picking your partner, conduct a 4C’s Stakeholders Analysis of everyone who might be affected by the decision:

Customers: How will your longtime customers react to this partnership? How will your partner’s customers? What will they get out of it?

Company: Does the partnership match your brand and everything you stand for? Will your employees, investors, and other executives see this as increasing sales or selling out?

Competitors: Can your competitors exploit this in any way? Can they hook up with an even stronger partner?

Community: Are there interest groups or government departments that can help or hurt this collaboration?

If you partner with someone who’s controversial, prepare for protesters — or for your own customers and employees to walk out on you. Just because you’re a fan of the National Rifle Association or Greenpeace doesn’t mean that everyone else in your network feels the same way. Determine if the cross-promotion is worth having these people walk away. Conversely, if your goal is to have a business where everyone thinks like you, perhaps that’s the way to go.

And remember that not all controversy is bad for business. Hollywood movies often do better when they’re being picketed. And although Ann Coulter is a brain-eating mollusk in spiked heels, she’s great for ratings (see “spiked heels”), so now that Apple’s hit up Wal-Mart, why shouldn’t Steve Jobs hook up with her to bring in right-wing consumers?

Shudder.

Good business or not, some unions should never be visualized, least of all consummated.

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Freddy is the Founder & Creative Strategist of Atomic Tango. He also teaches at the University of Southern California (go Trojans!), shoots pool somewhat adequately, and herds cats. Freddy received his BA from Harvard and his MBA from USC.